Mastech Digital, Inc

As a reminder, we will not be providing guidance during this call, nor will we provide guidance in any subsequent one-on-one meetings or calls. I will now turn the call over to Jack for a review of our first quarter 2023 results.

Thanks, Jen, and good morning, everyone. First quarter 2023 was clearly a disappointing quarter for MassTech Digital. Revenues totaled $55.1 million, representing an 8% revenue decline compared to $59.8 million reported in Q1 2022. Both of our business segments were impacted by economic uncertainty, including customer concerns regarding inflationary conditions and a possible recession. Our data and analytic services segment contributed revenues of $9.4 million compared to $10.2 million in the 2022 first quarter, as order bookings in the second half of 2022 were short of expectations, which had an impact on our Q1 2023 results. For the first quarter of 2023, revenues in our IT staffing services segment totaled $45.7 million compared to $49.6 million in the first quarter of 2022. Demand declined during the quarter, which resulted in a reduction of 84 billable consultants. Gross profit in the first quarter of 2023 totaled $13.5 million compared to $15.9 million in the first quarter of 2022. Gross margins as a percent of revenue in Q1 2023 was 24.5 percent compared to 26.7 percent in the 2022 first quarter. This margin variance was largely due to lower utilization and lower project margins on several long-term assignments in our data and analytic services segment, and a reduction in direct hire revenues and lower utilization rates on several financial clients in our IT staffing services segment. Gap net income for the first quarter of 2023 was $261,000, or 2 cents per diluted share, compared to $2.3 million, or 19 cents per diluted share, in Q1 2022. Non-gap net income for Q1 2023 was $1.4 million, or 12 cents per diluted share, compared to $3.3 million, or $0.28 per diluted share, in the first quarter of 2022. SG&A expense items not included in Q1 non-GAAP financial measures, net of tax benefits, or one stock-based compensation, and two, the amortization of acquired intangible assets, and they're detailed in our first quarter, 2023, earnings release, which is available on our website. It should be noted that both gap net income and non-gap net income in Q1 2023 were impacted by a $400,000 pretax expense for professional services related to an outstanding employment claim asserted by a former employee. Addressing our financial position, At March 31, 2023, we had $9.1 million of cash balances on hand, no bank debt outstanding, and borrowing availability of $31.5 million under our revolving credit facility. Our day sales outstanding measurement was 61 days at quarter end, which is well within our target range of 60 to 65 days. During the first quarter, we didn't execute on our share repurchase program due to an extended trading blackout period. We expect to have the ability to execute on the share repurchase program in the near term. I'll now turn the call over to Viv for his comments.

Good morning, everyone. Thank you, Jack, for the detailed financial review of our operating results for Q1 2023. The first quarter of 2023 was a challenging quarter to say the least. Our IT staffing services segment saw a notable decline in demand during Q1, as the possibility of a recession appears to be weighing heavily on clients' spending dynamics. With approximately half of our billing consultants employed in the financial services industry, recent bank failures have also had an adverse impact on our IT staffing business. Our data analytics segment performance was also impacted, largely due to the order booking shortfalls that occurred in the second half of 2022. Activity levels, however, were more robust with respect to the building of a pipeline of opportunities during the first quarter. Michael will talk more about the state of affairs in the data and analytics services business in a few minutes. While we cannot say when the economic outlook will improve, We can say that our businesses remain fundamentally sound, our financial clients are among the strongest in the industry, and we have a solid balance sheet and access to ample capital to fund our current business needs and support the share repurchase program we announced earlier this year. Let me now turn the call over to Michael for his comments related to the data and analytics services segment. Over to you, Michael.